Managerial made a really big mistake when it embraced just in time management and supply chains because the idea is to go as lean as possible with the result that systems are extremely fragile. A sophisticated Economics would find a way to spend money on redundancy, but that is beyond the capacity of current theories of budgeting.
Only redundancy , sometimes called backups, is a way to avoid the fragility of supply chains. The principles conflict. Backups are not a general purpose redundancy because they usually just duplicate the system that they are backing up whereas redundancy is to have alternate path to the same goal There is an emerging recognition in economics that supply chains are easy to break but without facing the fact the principles efficiency and redundancy conflict, especially at scale. Such as climate change where we could shift off of fossil fuels when we began to notice the greenhouse effect problem What would the redundant system look like? And more importantly, what would the management system be that could handle such conflicts? I don’t think the problem can be solved without fracturing economic theory. This joins the problem of externalities, not accounted for as key reasons why Economics is failing us.
Great insights, Doug.
A lot of JIT and Lean concepts articulated by Deming and later Juran were in direct opposition to the Alfred Sloan models of assembly line risk reduction offered by a deep availability of components and parts at each station of the assembly process.
Sloan was deeply influenced by Ford's Charlie Sorensen who was the hands-down guru of replacing the static position auto assembly process (the builder buck) with basically dragging the automobile work-in-progress through the warehouse where the parts were. This reversal of thought gave us the serial assembly line process.
Parts availability and redundancy along the assembly line provides robustness for the goal at hand of creating a product in a reliable and predictable way but practitioners such as Ohno and Ohmae thinned out the robustness of the systems and left us with brittle concepts such as JIT, TAKT and Kaizen, to name but a few.